Proposal of a $500,000 Salary Cap Raises the Question: What to Do?

You used to make gazillions. Now you won’t even make an honest, old-fashioned million. What to do?

That thought could have flashed through the minds of people accustomed to a lot of zeroes in their paychecks after President Obama announced his plan to place income limits on executives who work for companies that receive federal bailout money. The plan includes a $500,000 cap on compensation for senior officials and new restrictions on other kinds of megabuck payouts, like severance pay.

It was enough to raise the obvious question: What if your salary were capped at $500,000 a year?

Time to look up a couple of people who have made more than that, and ask, when was the last time they had made that little? (It’s still a lot of money by almost any measure.) And, how did so much money change their lives?

“It would take me back to ’91 or ’92,” said Mary Rodas, who made big money when she was a teenager as vice president for marketing of the company that made Balzac, a ball-in-a-sack toy that became a top seller at F.A.O. Schwarz.

In those days she rode around in a limousine (“I was too young for a driver’s license,” she said) and did her market research at the private school she attended, trying out product designs and colors on younger students.

She owned 5 percent of the business, and bought stocks like Disney and General Electric.

She said that if she had faced a $500,000 limit as a corporate executive, she would have gone out on her own, as an entrepreneur. She would have become a toy distributor, handling sales instead of marketing.

“I would have been making more money than being capped as an executive of a toy company,” said Ms. Rodas, who is now the associate director of admissions at the New York College of Health Professions in Syosset, N.Y. When she was asked whether, with her investments, she was still making more than $500,000 a year, she said: “Everything is so different with then and now. That’s something I don’t disclose anymore.”

Barbara Corcoran, who started a Manhattan real estate firm with $1,000, also looked back to the early 1990s, when she crossed the $500,000-a-year threshold.

“I think the year before I made $42,000 and the following year I think I cleared a million-one something,” she said. The money made it possible to buy her parents new cars: a Lincoln for her father, a Pontiac for her mother.

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“The other life difference,” she said, “was it made it affordable to go to extreme measures to have a child.” She signed up for in vitro fertilization treatments that cost $12,000 each. After seven tries, she said, “finally it worked. Without that kind of money, I don’t think I’d have my first child.”

Or, perhaps, her second, her 3-year-old daughter, adopted in 2005. How much did that cost? By then, four years after she sold her real estate firm for a price that was said to be close to $70 million, “I was rich enough where I didn’t have to ask,” Ms. Corcoran said.

She checked with her bookkeeper: $62,000.

Ms. Corcoran does not have to worry about the $500,000 cap. Neither does Eve Pidgeon. But she said it looks pretty good, all things considered.

“I’d take that $500,000 in a second,” said Ms. Pidgeon, a spokeswoman for GreenPath Debt Solutions, a nonprofit financial counseling company. “If I was making $500,000 a year, I’d be able to live very well within that without using credit cards. I know how to live within my means on my far-less-than-$500,000 salary. I have happiness with my salary.”

Eric Salazar, a GreenPath group manager, had some ideas for downsizing, even though the $500,000 limit is well above what most of his clients make.

“Some of the things I’ve recommended to my higher-end clients are, if that’s two or three cars in the household, how many do you really need? Do you want to keep the house or the cars? Which would it be?”

A version of this article appears in print on , on Page A23 of the New York edition with the headline: Makes You Wonder: How to Live on a Mere Half a Million a Year?. Order Reprints|Today's Paper|Subscribe